Sensex, Nifty snap record-breaking run on Infosys shocker; tank over 1%

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| Photo Credit: Paul Noronha

Benchmark stock indices Sensex and Nifty tumbled over 1% on July 21 due to deep losses in IT behemoth Infosys which slashed its FY24 growth outlook.

Snapping its six-day record-breaking rally, the 30-share BSE Sensex tanked 887.64 points or 1.31% to settle at 66,684.26. During the day, it plummeted 1,038.16 points or 1.53% to 66,533.74. The NSE Nifty fell by 234.15 points or 1.17% to end at 19,745, cutting short its six-day winning run. As many as 36 Nifty shares closed in negative while 14 advanced.

From the Sensex pack, Infosys tanked over 8% after the company reported a lower-than-expected 11% rise in net profit for the June quarter and delivered a shocker as it slashed its FY24 growth outlook to 1-3.5% on delayed decision-making by clients amid global macro uncertainties.

“The weak guidance from Infosys cast a shadow over the outlook of the Indian IT sector, causing a delay in Nifty’s pursuit of the 20,000 mark. While the heavyweights surrendered to the bears, the small caps demonstrated resilience,” Vinod Nair, Head of Research at Geojit Financial Services said.

Global markets presented a mixed picture, with the U.S. market struggling due to weak earnings, while U.K. retail sales exceeded expectations with a 0.7% MoM growth, he added.

A decline in shares of market bluechip firms Reliance Industries and Tata Consultancy Services also added to the bearish trend in equities. Hindustan Unilever, HCL Technologies, Wipro, and Tech Mahindra were the other major laggards.

On the other hand, Larsen & Toubro rose the most by 3.88% after it bagged an order of worth over ₹7,000 crore from the bullet train project.

NTPC, State Bank of India, Kotak Mahindra Bank, Tata Motors, ICICI Bank, Sun Pharma, Maruti and Bharti Airtel were also among the gainers.

BSE Midcap dropped by 0.26% to 29,547.28 while BSE Smallcap index edged up 0.13% to 34,146.66 points.

Among sectoral indices, BSE IT fell the most by 4.40%, followed by consumer durables which dropped 1.09%.

“The decline was widespread wherein the IT pack faced the maximum heat, followed by FMCG and energy majors. Meanwhile, the broader indices traded mixed, capping damage to the market breadth,” Ajit Mishra, SVP – Technical Research, Religare Broking Ltd said.

In Asian markets, Tokyo and Shanghai ended lower while Seoul and Hong Kong settled in the positive territory.

Equity markets in Europe were trading mostly in the green. The US markets ended mostly lower on Thursday.

Global oil benchmark Brent crude climbed 1.19% to $80.59 a barrel.

The BSE benchmark had jumped 474.46 points or 0.71% to settle at its fresh all-time closing high of 67,571.90 on Thursday, extending its winning momentum to the sixth day. During the day, it rallied 521.73 points or 0.77% to hit its lifetime intra-day peak of 67,619.17.

The Nifty had climbed 146 points or 0.74% to end at its record closing high of 19,979.15. During the session, it had soared 158.7 points or 0.80% to reach its fresh record high of 19,991.85.

Foreign Institutional Investors (FIIs) were buyers on Thursday as they bought equities worth ₹3,370.90 crore, according to exchange data.